All the things you need to know to help pay for college in these challenging economic times from an independent, unbiased viewpoint.

04/27/2009

The Future of Federal Student Loan Program: Daily Round-Up

Lots of action today to report:

NASFAA President, Dr. Phil Day, in a letter to the membership today urged financial aid administrators to focus on the historic opportunity to make the Pell Grant a "true entitlement" and to come together to develop a new student loan model:

"If we simply oppose FFELP elimination without
offering alternatives or including ourselves in the debate, schools will be
forced to move to the Direct Loan program, either because the Obama budget
will have been accepted or because ECASLA expires in 2010.

We must move forward in good faith and help design a system that works best
for borrowers, taxpayers and institutions. In addition to the importance of
providing a workable alternative to the abrupt elimination of FFELP, we must
also remember the historic opportunity we have to make the Pell Grant a true
entitlement. This is a goal that NASFAA has worked toward for decades, and
there are many who never believed we would be so close to seeing this
essential change enacted."

CBA responded to Obama's televised speech on Friday with a press release, of which this is an excerpt from:

"Responding to today's White House event at which
President Obama promoted his plan for eliminating the Federal Family
Education Loan program, today the Consumer Bankers Association urged
policymakers to take a closer look at the proposal. Under the
President's plan, no new FFEL program loans would be made after June
30, 2010."

Interestingly, several months into this debate the CBA has not proposed a detailed and specific alternative student loan plan. Rather, in this press release, they recommended:

"CBA has called for Congress and the administration to
convene a meeting of stakeholders including students, parents, consumer
advocates, financial aid administrators, colleges, and loan providers
to examine various proposals for change."

More on the "inside the Beltway game" on how the debate over reconciliation for the student loan reform bill transpired last week, from the Washington Monthly.

One insider seemed to think that the reconciliation instructions that the House will vote on tomorrow will have an October 15th deadline, seeming to provide ample opportunity for lengthy debate on this issue.